“When it comes to putting the ‘smart’ into TVs, this feels very much like the smartphone industry in the decade before the iPhone,” Richard Waters writes for The Financial Times. “All the technology ingredients are there, it just needs someone with the vision to show how the TV experience could be transformed – and the muscle to overcome the industry vested interests that delay change.”

“So no wonder all eyes have been on Apple. Last year was widely tipped as the year that Apple would remake the TV in its own image,” Waters writes. “Now it is meant to be 2013.”

Waters writes, “And Apple needs to colonise the TV set. This isn’t because of the direct profits it stands to make. Samsung, the industry leader, doubled its operating profit margin from consumer electronics (mainly TVs) in the first nine months of 2012 – but still didn’t manage to break 5 per cent. Apple makes more than twice as much profit from the iPhone in a single quarter as the entire TV industry is estimated to make in a year. Rather, Apple needs to occupy the TV set to be able to plant its flag squarely in the living room – before Google or some other rival gets there first.”

Rob Enderle (Principle Analyst at the Enderle Group) here. I predict that a Nokia – RIM – Microsoft – Dell alliance will enter the TV space in 2013 with better specs, more features, and a great many apps. This TV will hit Apple square between the eyes. This TV set will even offer an optional heated floor blanket for my cat. Even John Dvorak will like this monster appliance. It will even feature a screen saver comprising a face shot of Michael Dell randomly bouncing around the screen.

It is unbelievable that Rob Enderly would dare to post on this site. He has zero credibility and is generally know as a man of modest intellectual gifts. He is a Microsoft shill and Apple hater with a very very poor track record of visualizing the future let alone finding his glasses today.

The only thing I can believe is that this has got to be a new year joke. (It wasn’t funny)

I know how utterly ridiculous Rob Enderle can be. It was too close to reality for me to be sure it wasn’t him.

Jeff II

Thursday, January 3, 2013 - 6:18 pm ·

I’m flattered by your comments, Electro. I can see that I’ve done way too much writing in my time such that now people take my scribblings seriously. 🙂 It’s a real compliment to be taken for Enderle (whom I briefly knew at ROLM/IBM). Not.

The “TV experience” is ripe for an Apple makeover. I can’t think of a better “next big opportunity” for Apple.

The current TV user experience is disjointed. You can do a lot of things with a TV, but those things are separate and distinct. You can watch broadcast/cable TV programming. You can watch movies on disc. You can play games on a Wii, or other console. There are a lot of messy cables, remote controls, and ever more complexity. The current trend is to add even more “boxes” to the TV, to add to the mess and complexity (because that’s the easy way).

Apple’s opportunity is to bring all of those separate things into ONE unified user experience.

Cable programming may a “vast wasteland” overall, but customers obviously want to access portions of it. Most movies on disc (or “on demand”) are garbage, but some are great. Etc…

Apple goal here is to improve the customer’s experience in accessing the specific TV content they want, while giving them access to everything they have now. That is how Apple makes their TV product a success on the order of iPad.

This would actually be more of the same strategy for Apple. The original Mac greatly improved the users’ experience in accessing computing capabilities. The original iPod greatly improved the way users accessed their music. The original iPhone greatly improved the way users accessed wireless services.

So much hot air here. The only thing that really matters is whether Apple or some other company is able to give people video on demand, the ability to pay for only the programs they want to watch. Whether that happens through enhanced DVR capabilities, or through peer-to-peer networking, or through streamed iTunes programming, it would change the entire television ecosystem. But content providers and cable/satellite distributors will fight like hell to make sure it doesn’t happen, and so far they are winning.

> But content providers and cable/satellite distributors will fight like hell… and so far they are winning.

THAT is why Apple will work WITH the cable companies, instead of fighting against them. Access to existing cable content will be one of the “things” integrated into Apple’s TV experience. Instead of an archaic cable box with an interface that is a bad copy of TiVo from the 1990’s, Apple will design the interface that is unified with the rest of the TV experience (resembling the current Apple TV interface).

When iPhone was originally released in 2007, did Apple try to duplicate its own wireless network infrastructure and services to compete against AT&T? No. Apple partnered with AT&T (and other “providers” worldwide). Before the App Store, iCloud, and Siri even existed, iPhone was successful simply because it provided a far superior user experience in accessing the existing wireless services customers already used. Then, over time, Apple steadily added its own “content” to the iPhone experience to further distinguish iPhone from the competition.

In the same way, the success of Apple’s TV effort depends on initially providing customers with access to content they already have right now, with a far superior user experience, AND additional benefits. With iPhone, the initial “additional benefit” was a built-in iPod, but Apple improved what it provides directly every year. With “iTV,” it will have integration of the existing Apple TV content, and Apple can gradually (and stealthily) improve what it provides directly every year. At some point in the future, many customers will find that they no longer need the cable-provided content and “cut the cable.” That is what you advocate, but with no way to get there. The approach I describe allows Apple to get there from here, by first being friends with cable providers.

One other key consideration is subsidy. The cable companies that partner with Apple may give Apple a subsidy for each “iTV” sold, in exchange for a usage “contract.” The subsidy (like the one for iPhone) allows iTV to be sold with an upfront price-tag that is comparable to (or maybe even lower than) “dumb” commodity HDTVs, while making Apple an acceptable profit per unit. The partnering cable company pays for the subsidy by collecting a monthly fee that replaces the current “rental fee” for the cable box (and by not needing to provide/maintain a cable box in the first place).

commun5

Thursday, January 3, 2013 - 1:06 am ·

I just find it hard to believe that people will be willing to pay the standard cable fees just so they can have the existing Apple TV integrated into their cableboxes. There’s no value-added here other than a little bit of interface work.

ken1w

Thursday, January 3, 2013 - 6:05 am ·

There is A LOT of value added. It’s a COMPLETE Apple television that has all the functionality of a “dumb monitor” HDTV, the current Apple TV mini-box, AND the cable provider’s “cable box,” wrapped up under ONE unified interface that resembles the current Apple TV interface.

No separate remote controls for the HDTV itself, cable box, and Apple TV box. No need to switch video input on the HDTV. No need to deal with the ugly cable box interface (and a remote control with dozens of buttons), but still have full no-compromise access to ALL current cable content. Then, using the SAME remote control and interface, switch over to the Apple-provided content to watch a movie rented from the iTunes Store (or Netflix). Maybe use a TV-centric version of Siri as part of the interface.

For the minority of current-day customers who do not want access to cable content at all, there can be a config of “iTV” that does not have the “cable box” functionality, just as an iPod touch is an iPhone minus access to wireless services, and there are iPads with or without access to wireless services. But as you acknowledged yourself, the majority of current-day customers will NOT accept an “à la carte” system. Apple’s TV product will fail (or will forever remain a “hobby”) unless customers have access to EVERYTHING they have right now through cable. Apple’s initial TV opportunity is to greatly improve the user’s experience, NOT provide the content.

This is just my speculation. Apple’s actual approach may be completely different. But as usual, people just do not realize how much better their TV experience can be until Apple shows everyone how to do it. Then, it will be “obvious” and the competition will try to copy as quickly as possible.

Here we go again, people telling Apple what they think it should do to try make something better. Just because something can be done, doesn’t mean that it should be done. Apple strives to make great products for people, to have the best user experience, is easy to use, elegant package, and it just works. Apple is NOT going to tackle TV until these criteria, among other things, can be met. Steve Jobs said so himself at an AllThingsD interview where he mentioned many barriers with TV at the time, such as the TV networks, etc. It was hard enough getting cellular network cooperation — it will be tougher to get TV network cooperation. I guess we shall see.